FSA fines financial advice firm £49,000
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A Derbyshire-based financial advice firm and its two partners have been hit by fines totalling £49,000 levied by the Financial Services Authority over failures with the firm’s sales and advice processes.
The regulator found that Sett Valley Insurances Services, which provided mainly investment advice but also offered some insurance advice, failed to record sufficient information about customers’ personal and financial circumstances to ensure advice was suitable.
Sett Valley also failed to communicate with customers in a clear and fair way and had inadequate systems and controls that did not meet the FSA’s requirements.
The failings at Sett Valley were identified during an FSA visit focussing on the fair treatment of customers as part of its assessment programme for small firms.
Both of Sett Valley’s partners, Leslie Lugsden and John Hargreaves, were responsible for the problems identified within the firm.
The FSA therefore ruled that Lugsden and Hargreaves had failed in their roles as approved persons.
Lugsden and Hargreaves were each fined £10,500 for breaching the FSA’s Statement of Principles for Approved Persons.
Sett Valley was also fined £28,000 for breaching the FSA Principles for Businesses.
The firm is also appointing an external compliance consultant to conduct a phased past business review of products sold and compensate any customers who may have suffered loss.
Margaret Cole, director of enforcement and financial crime at the FSA, says: “It is unacceptable for a firm operating in this industry not to comply with the FSA’s principles and rules.
“The partners of Sett Valley failed to control their business effectively and exposed their customers to the risk of receiving unsuitable advice.
“The fine levied on Sett Valley reflects the seriousness of the failings found at the firm while the fines imposed on the partners demonstrate the importance we place on senior management discharging their responsibilities effectively.”
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